HSBC has received approval from China's banking regulator to
create a village bank in Hubei Province, becoming the first foreign
bank to take its business to rural areas, HSBC announced on
Thursday.
The village bank will be opened in Zengdu District, which has a
population of 2 million in the town of Suizhou at the end of 2007
and is expected to employ 25 people.
"The new bank will provide financial service tailored to rural
communities and local enterprises," said Vincent Cheng, chairman of
the HSBC Bank (China) Company Ltd.
A problem afflicting Chinese farmers and rural enterprises at
the moment is their relative lack of access to financial
institutions. Official figures show Chinese farmers rarely obtain
loans of more than 5,000 yuan.?
On Monday, the China Banking Regulatory Commission (CBRC) vowed
to help more banking institutions enter the rural banking sector
and help it to develop. At the end of 2006, the CBRC scrapped
working capital limits for domestic financial institutions in rural
areas so that banking networks could be developed in the
countryside.
It also lowered the registered capital threshold to 3
million yuan (US$385,000) for banks in counties and 1 million yuan
in villages and towns.
The CBRC has approved six pilot schemes in six provinces
including Qinghai and Gansu. Two of them -- Huimin village bank and
Huimin finance company -- began operations last Thursday in Yilong
county of southwest China's Sichuan Province.
HSBC has developed financial business in rural areas in Brazil,
India, Indonesia, Philippine and Mexico.
(Xinhua News Agency August 10, 2007)
